[OPE-L:1299] Re: Cheaper Machines

John R. Ernst (ernst@pipeline.com)
Mon, 4 Mar 1996 09:16:52 -0800

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My point was that if we only consider "cheaper machines" and
exclude better machines, the more expensive machines can
still be used in production until they wear out physically. If
we assume that their physical life is less than their economic
life, "better machines" must be part of the picture.

In your example below, it seems clear that the "your" capitalist
only takes into account physical depreciation as he sets up his
depreciation schedule. He then has to allow for the "moral
depreciation" due to the cheaper machine. I am suggesting
that in setting up his depreciation schedule the capitalist can
only know the "probable life" of the machine and that the life
anticipated is the economic or social life. Note that Marx includes
an allowance for "moral depreciation" in computing the value of
the output. Thus, unlike your capitalist, Marx's would not have
anticipated the life of the machine to be 10 years but something
less since the economic life is less than the physical life.


Iwao says:

>>Given 1-3, it would seem that the driving force behind
>>"moral depreciation" is not cheaper machines, but "better
>I cannot understand the point. To my eyes, the conclusion
>would be that the driving force behind "adopting new machines"
>is not cheaper machines, but "better machines".
>Isn't it simply moral depreciation that capitalists fully depreciate
>the existing machines when new cheaper machines appear?
>I understand John's expression "full depreciation when cheaper
>machines produced" as following example. Is it right?
>1st term: machine worth $100 (its physical life is assumed 10 years)
>2nd term: same machine produced at $70
> the full depreciation should be $40 ($10 for physical, $30
>for moral)
>in OPE-L solidarity,
>Iwao Kitamura
>E-mail: ikita@st.rim.or.jp